Sovereign Gold Bonds turn to goldmine: Skyrocketing 159% returns leave FDs and equities in the dust

Sovereign Gold Bonds (SGBs), introduced by the government in 2015, have shown robust performance over the past eight years, offering investors a compelling combination of capital appreciation and interest income. On average, SGBs have delivered annualised returns ranging between 11% and 14%, influenced by the timing of each issuance.

​For instance, "SGBs in India have delivered impressive returns upon maturity, primarily due to the significant appreciation in gold prices over the investment tenure. For instance, the first tranche of SGBs, issued in November 2015 at ₹2,684 per gram, matured on November 30, 2023, with a redemption price of ₹6,132 per gram. This represents a return of approximately 128% (absolute return) over eight years, equating to an annualized return of around 10.92%," said Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL).

"Similarly, the SGB 2016-I series, issued in February 2016 at ₹2,600 per gram, matured on February 8, 2024, with a redemption price of ₹6,271 per gram. This resulted in a gain of approximately 141%, translating to an annualized return of about 11.44%. These returns are notably competitive, often surpassing those from traditional investment avenues like fixed deposits and even some equity instruments," added Kothari.

Also, the SGB 2016-III series, issued in November 2016 at ₹3,007 per gram, matured on November 30, 2024, with a redemption price of ₹7,788 per gram—yielding an approximate return of 159% over eight years.